Most businesses starting in Oklahoma selling a product or offering certain services will need to register for an Oklahoma sales tax permit. This permit is also referred to as a seller’s permit, sales tax license, sales tax number, or sales tax registration.
The sales tax permit is obtained through the Oklahoma Tax Commission as a part of applying for an Oklahoma Business Registration.
Check out the rest of this guide to determine who needs a sales tax permit, what products and services are taxable, how to register for a permit, and reporting requirements.
Related: Guide to starting a business in Oklahoma
Who needs a sales tax permit in Oklahoma?
A business must register for a sales tax permit in Oklahoma when:
- A business has an economic nexus. Economic nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Selling tangible personal property and taxable services in Oklahoma (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.)
- Hiring employees based in Oklahoma (including remote employees, sales representatives, or agents) are working in Oklahoma
- An online business located in Oklahoma is selling taxable products to Oklahoma residents
- A remote seller or an out-of-state dealer who is selling at least $100,000 in taxable products to Oklahoma residents.
What products and services are taxable in Oklahoma?
Physical products
There are a few exceptions, but almost all physical products are taxable when sold at retail in Oklahoma. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Certain agriculture products and equipment, in addition to prescriptions, are tax-exempt.
In Oklahoma, labor charges are generally not taxable. Consider an auto repair shop where you get your car’s transmission fixed. The labor cost for the mechanic to repair the transmission would not be taxable. You would only pay sales tax on any physical parts used in the repair, such as a new transmission or other car components.
Contrast this with a business specializing in custom-built kitchen cabinets in Oklahoma. Here, the process involves designing, cutting, assembling, and installing the cabinets. Although the labor itself for building and installing the cabinets isn’t taxed directly, the total charge to the customer for the completed cabinetry project, which includes both materials and labor, is subject to sales tax. This is because the labor is incorporated into the overall price of the finished product.
Digital Products
Digital products are exempt from sales taxes in Oklahoma.
Services
Most services aren’t taxable in Oklahoma, however, there are a few exceptions, some of which include:
- Short-term lodging
- Printing and advertising (except in newspapers, periodicals, and on billboards, as well as any advertising through electronic broadcast media, including radio, television, and cable television)
- Transportation and auto parking
- Admission fees
How to register for a sales tax permit in Oklahoma
A sales tax permit can be obtained by registering for the Oklahoma Business Registration through the Oklahoma Taxpayer Access Point.
Information needed to register includes:
- Contact information
- Legal business name
- Doing Business As name (if applicable)
- The physical address, mailing address, and phone of the company
- Type of business entity: sole proprietorship, partnership, corporation, Limited Liability Company (LLC)
- Federal Employer Identification Number (FEIN) from the IRS, or the owner’s Social Security Number if a sole proprietorship with no employees
- Names and addresses of owners/officers/members
- Description of what products or services are being sold
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, it charges the appropriate sales tax rate to the customer. The business collects this tax, which it then sends to the Oklahoma Tax Commission.
How much is sales tax in Oklahoma?
If the purchase is made at a store or in a mobile location, the sales tax rate varies depending on where the sale took place in Oklahoma. In addition to the statewide sales tax, cities, towns, counties, and municipalities may add additional sales taxes. When shipping in-state, the sales tax is based on the purchaser’s address.
To find sales tax rates throughout the state, see the sales tax rate locator from the Oklahoma Tax Commission.
When are Oklahoma sales tax returns due?
The Tax Commission will determine a filing frequency based on the expected volume of sales, which will be monthly, quarterly, or semi-annually. Most businesses will file monthly.
Filings are due on the 20th day of the month following the reporting period unless the 20th falls on a weekend or federal holiday, which would move to the next business day.
Even if the business had no sales during the reporting period, a filing indicating no sales is still required.
Oklahoma Sales Tax Permit FAQs
How much does an Oklahoma sales tax permit cost?
In Oklahoma, the fee for a sales tax permit is $20 for the first location and $10 for each additional location.
How long does it take to get an Oklahoma sales tax permit?
Expect up to five days to process an Oklahoma sales tax permit.
Do you have to renew an Oklahoma sales tax permit?
The sales tax permit is renewable every three years from the date it was issued. Be mindful that if any information about the business changes, such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Tax Commission.
Is a business license the same thing as a sales tax license?
No – A business license and a sales tax permit serve distinct purposes.
A business license authorizes the operation of a business within a particular jurisdiction, ensuring compliance with local laws and regulations. On the other hand, a sales tax permit enables a business to legally collect sales tax from customers, which is then remitted to the state government.
Typically, businesses require both a license and a permit to operate fully within the law.
How do I get a wholesale license in Oklahoma?
A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number and a completed Oklahoma Resale Certificate (also referred to as a withholding license, sales tax exemption certificate, or reseller’s permit) to document that the items being purchased are for resale.
If you have questions about the sales tax permit, the Oklahoma Tax Commission has an FAQ on sales taxes in Oklahoma, or they can be contacted by calling 405-521-3160.
